Thirteen percent of U.S. homes are now vacant according to a new report in the Huffington Post. Prices are dropping but people who have the money to buy are reluctant to enter the housing market fearing prices will drop even more. I think we’d hope that by now things would turn around but I’m not seeing much change in the areas around the country where I do seminars. I’m very concerned about properties that still appear to be owned by individuals but that the lenders actually own. Recently I was researching a property that the former owner told us he turned over to a lender last summer. He was right. We didn’t know though because the lender had never filed the necessary paperwork with the Recorder of Deeds. Consequently, all notices of violation went to him and not the lender. Whether this was an oversight or intentional, I have no idea but it sets us back even further in identifying the responsible party. I’m also seeing a number of judgments for foreclosure where the sheriff”s sale has never taken place. Sometimes this is due to a bankruptcy being filed but in other cases it remains a mystery. This is why ordinances to make lenders responsible for the upkeep of the vacant property prior to a foreclosure judgment are so critical to preserving neighborhoods.
There’s a bill pending in Illinois which would allow local governments to pass ordinances that would make lenders responsible for the upkeep of vacant properties in foreclosure. Needless to say, the lenders are fighting the bill. They’ve proposed a $50 fee per foreclosure that would go into a pool that local governments could draw from to reimburse themselves for their costs. $50 per property, hmmmm, that’ll go really far. Maybe it’ll cover half a lawn being cut, once. They must really think we’re stupid. I’m disheartend that when I contacted my state rep, I received a nice “thanks for your e-mail” message, completely ignoring the expertise on this issue I’ve developed. The banks say that they just wouldn’t be able keep up with all of the municipal ordinances that might be passed; maybe they would then know what it’s like to be an inspector who is desperately trying to reach a live human being at a lender when a property has 6 feet of water in the basement of a vacant home under foreclosure. I wish I wasn’t so cynical about the political process. I wish I believed it was possible that politicians would do the right thing and help local government preserve neighborhoods. I want to believe that if they only knew about the problems we face, they’d give us some meaningful tools. But, if they ignore our attempts to educate them, how can they make an informed decision?
There’s a very sad story about the death of a worker in New York City at a development owned by someone who keeps getting sued by the city and yet no one seems able to prevent him building shoddy structures. One quote that caught my eye was:
Spokesman Tony Sclafani said the department has no authority to deny or revoke permits based on previous safety violations or unpaid fines.
It got me wondering about whether there are jurisdictions that do have laws that deny building permits to builders who have unpaid fines or previous safety violations. I’d love to hear from someone who has such an ordinance so I can share it with the readers of this blog. I realize that builders will just incorporate under different entities to avoid such a penalty but even that could be addressed in an ordinance (e.g. based on someone’s percentage of ownership).
It always disheartens me when an important rental inspection ordinance encounters opposition. Based on personal experience, I am convinced that a well executed ordinance can prevent buildings from becoming blighted and can protect tenants from negligent landlords. I was recently reading about a town that adopted a less stringent rental inspection program. http://adirondackdailyenterprise.com/page/content.detail/id/521399/Village-adopts-milder-rental-inspection-plan.html?nav=5008 The town decided not to make owners register rental property. The problem with this approach is that the most effective rental inspection programs require that the owner has a license or permit to rent the property. If the property does not meet minimum code standards, the property cannot be rented until the problem is fixed. Regular inspections are part of the program. If an ordinance is watered down, the inspector has to keep sending notices of violation and citations to the owner while the owner continues to collect rent from the tenant living in substandard conditions. While eventually, the court will order the owner to comply, those owners covered by a rental licensing ordinance seem to comply more quickly. Once landlords become used to a rental inspection ordinance, they tend to do a better job of making minor repairs so large ones don’t become necessary. An inspection program is often considered as part of a crime-free housing ordinance. I’ve been helping local governments understand the benefits of rental inspection programs by making presentations at workshops and board meetings. Sharing my experience with people who are concerned about reducing crime and preserving property values is very rewarding. As more and more owner occupied properties turn into rentals, strong rental inspection ordinances become vital in preserving the quality of life in a community.
Inspectors often get frustrated with how slow demolition suits proceed through the court system under their state statutes. Most states establish a a strict procedure that must be followed before a building can be torn down. Some local authorities adopt the International Property Maintenance Code as their ordinance. The IPMC contains Section 110 which describes the procedure to be followed when that code is used. The code official can order the removal of a structure that is so dilapidated as to be dangerous, unsafe, insanitary or otherwise unfit for human habitation. After the proper notice and order have been served, the code official can cause the structure to be demolished or removed if the owner fails to comply with the demolition order within a specific time prescribed and has not appealed the order. There is no involvement of the local court unless an appeal of the order is filed. One of the concerns that municipal attorneys have is whether state law preempts local ordinance procedure in these kinds of situations. A recent case in Illinois supports the position that a municipality is not precluded from using a procedure established by a local ordinance instead of the state statute where there is no language in the state statute that indicates it is meant to preempt the use of local ordinances. In Village of Northfield v. BP America, Inc., 342 Ill.Dec. 827(2010), an abandoned gas station was located on a parcel of property. The Village of Northfield issued a citation against BP America because the property was a public nuisance under its local ordinance. The local ordinance requires an abatement of the nuisance, including the possibility of razing the structure. When BP did not comply, the village filed a lawsuit against it and the court found it to be in violation and issued a daily fine. BP argued that it was not required to pay a fine because the local ordinance was preempted by the Illinois Municipal Code. The court found that BP was correct because the state law preempted the local ordinance. The Village of Northfield appealed the decision. The Appellate Court found that there is nothing in the state statute that specifically limits a municipality’s ability to regulate an abandoned building to the procedures provided for in that section of the Municipal Code. Therefore, the village nuisance provision was not preempted by state law. This decision only applies to Illinois cases, specifically in the First District, but courts in other states may look to it for guidance if such an issue comes before their courts on the same issue.
